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‘Build-out’ is back as utilities race to upgrade the grid

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Current high demand for transmission towers is expected to continue in the foreseeable future—good news for steelmakers.

Many, but not all, transmission towers—including lattice towers and transmission poles—are made of high-strength steel (HSS) sheet or plate that has been formed into tubular structures, according to James Heady, principal transmission engineer at Orange & Rockland Utilities Inc., Spring Valley, N.Y.

Myriad factors are driving this demand, including greater electronics usage in home offices and more renewable energy sources plugging into the grid.

"There is more need for transmission capacity and, therefore, for more transmission towers, just because of the nature of the electric market," said Ron Snead, vice president of asset management for the power delivery group of Duke Energy Corp., Charlotte, N.C. "There is more of a need to move power over longer distances, to improve reliability, to beef up the transmission system and to allow for a more economic exchange of energy. Demand is growing."

Attributing much of it to "booming" demand for electricity-based and electricity-recharged electronics technology, Chris Olert, a spokesman for New York-based Consolidated Edison Co., which also owns Orange & Rockland, said that his utility's customers are using about 20 percent more electricity than they were in 1998. The biggest growth area is for electronics technology-rich home offices, he said.

But even for conventional residential customers, "almost everyone has central air conditioning or at least air conditioning, as well as computers and maybe a wide-screen television, and all of this technology increases the power load," Heady said.

The load also is being increased by a number of other factors, including population growth in certain service areas. This is the case in El Paso, Texas, according to a spokeswoman for El Paso Electric Co., a utility that is in the process of building more transmission substations, lines and towers largely because of a building boom caused by the realignment of military bases.

"We are expecting up to 50,000 more troops and their families at Fort Bliss military base and an increase, as well, of businesses to support that growth, which began in 2006 and is expected to continue for the next five to eight years," she said.

While this is a unique situation, the build-out of transmission infrastructure is quite widespread, according to Mike Heyeck, senior vice president of transmission at American Electric Power Co. Inc. (AEP), Columbus, Ohio, who noted that there have been many "major backbone improvement projects" announced recently by both utilities and regional transmission organizations.

"For example, the state of Texas has announced a $4.9-billion build-out program to connect competitive renewable energy zones to the grid—largely wind energy," he said. "This build-out is occurring throughout the country. While a number of the initiatives are connected to renewables, that isn't the only motivating factor. This is also occurring to increase the reliability of the grid, increase market efficiency and to relieve congestion."

The build-out has been a long time coming, Heyeck said. "There had been a lack of investment in transmission—not just in towers, but other infrastructure as well—for the past decade or more. There had been a big build-out between the 1950s and the 1970s, but that slowed down significantly. Now, many utilities are trying to build up their networks again, as well as to do repair and maintenance work on old infrastructure." In many cases, that means building new lines due to increased usage. "A lot of the infrastructure was built just after World War II, when there wasn't as much need for transmission."

Demand for new transmission lines to tie in renewable energy sources to the power grid will only grow, Snead said. This isn't just because of the obvious increased interest in wind power and other "green" power-generating technologies, but because more times than not renewable energy is generated in somewhat remote locations. That means there is a need for new transmission lines and transmission towers and/or poles to connect, for example, wind farms to the people who need the power.

A number of factors impact the number of towers needed with the new transmission lines, not the least of which is that in certain major cities like New York transmission lines are buried underground since there's no room in the city for towers, Consolidated Edison's Olert said.

A general rule of thumb, though, is four or five towers per mile, which under current projections would require a substantial number of towers and/or poles, Heyeck said.

Further complicating things is that while all lattice towers tend to be made of steel, the same isn't true of transmission poles, many of which are made of wood, Heady said. However, steel poles have become more popular in recent years. "Steel poles are lighter and easier to handle. Also wood cannot handle some loads, especially with longer spans of transmission lines," he said. However, wood might be more economical in smaller-span, lower-voltage applications.

But the recent volatility of steel prices has caused some utilities to "take a hard look" at any alternatives, Snead said, especially since they can't easily pass along increased costs to their customers. To do so requires a "rate case" with the state public utilities commission. "Although, in general, we haven't had any problems having towers or substation construction approved in a rate case," he said.

Rather than going that route, utilities might look at competitive materials or "seek to deploy measures to help people use less electricity or look to see if we could do something with the existing infrastructure, such as putting larger conductors on existing towers, to meet the needs of our customers at least for a while," Snead said. MYRA PINKHAM

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